Court Rules for Comcast, Says FCC Cannot Impose Net Neutrality

Unanimous decision states the FCC does not have the authority to regulate Internet Service Provider’s network management practices

WASHINGTON, D.C.—In a ruling that knocks net neutrality back a notch, a federal appeals court has decided in favor of Comcast in its 2008 appeal of a Federal Communications Commission (FCC) decision prohibiting the cable provider from slowing BitTorrent traffic in an effort to reduce network congestion.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled unanimously Tuesday that the FCC does not have the statutory authority to have interfered with Comcast’s network management practices.

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The case reaches back to 2007, when several Comcast subscribers noticed that the company was interfering with their use of peer-to-peer networks, specifically BitTorrent, which consumes large amounts of bandwidth. The action was challenged by two non-profit advocacy organizations, Free Press and Public Knowledge, which filed a complaint with the FCC. Following a period of public comment, the FCC issued the order that was then challenged by Comcast.

According to the decision, while the FCC acknowledged that it does not have express statutory authority over the network management practices of ISPs, it nonetheless relied on Section 4(1) of the Communications Act of 1934, “which authorizes the Commission to ‘perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions.’ The Commission may exercise this ‘ancillary’ authority only if it demonstrates that its action—here barring Comcast from interfering with its customers’ use of peer-to-peer file sharing networking applications—is ‘reasonable ancillary to the … effective performance of its statutorily mandated responsibilities.’”

The judges said the Commission failed to make that showing, and concluded that the FCC’s reliance on congressional statements of policy were surpassed by Supreme Court and D.C. Circuit case law, and that while various provisions in the Communications Act do authorize related responsibilities by the Commission, “for a variety of substantive and procedural reasons those provisions cannot support its exercise of ancillary authority over Comcast’s network management practices. We therefore grant Comcast’s petition for review and vacate the challenged order.”

Needless to say, the ruling does not sit well with consumer advocates who fear that unregulated providers will have unprecedented control over not only what websites subscribers can access, but also what content they may be able to see.

“The ruling would allow Comcast and other Internet service providers to restrict consumers’ ability to access certain kinds of Internet content,” the New York Times reported, “such as video sites like Hulu.com or Google’s YouTube service, or charge certain heavy users of their networks more money for access.”

According to Ben Scott, policy director for the Free Press, “The decision destroys the FCC’s authority to build broadband policy on the legal theory established by the Bush administration.”

The Times also posits that the decision could jeopardize Comcast’s imminent acquisition of NBC Universal.

“Members of Congress have expressed concern that the acquisition could give Comcast the power to favor the content of its own cable and broadcast channels over those of competitors, something that Comcast has said it does not intend to do,” the paper reported. “Now, members of Congress could also fret that Comcast will also block or slow down customers’ access to the Web sites of competing television and telecommunications companies.”

In a statement issued Tuesday, FCC spokesperson Jen Howard wrote, “The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans. It will rest these policies—all of which will be designed to foster innovation and investment while protecting and empowering consumers—on a solid legal foundation.

“Today’s court decision invalidated the prior Commission’s approach to preserving an open Internet. But the Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.”